چکیده:
Financial literacy has ever increasing importance in our day. Whether
people are financially knowledgeable, helps greatly in making rational
investment decisions. Numerous studies have been undertaken to explore,
investigate and measure financial literacy in several developed countries.
However, very few of them have been conducted in the Arab World and Gulf
Countries. Therefore, the purpose of this study is to measure the level of
financial literacy of the Bahraini individual investors. In addition to,
examine the relationship between financial literacy and investment decisions
in the Kingdom of Bahrain. The study draws on 228 questionnaire surveys of
investors in Bahrain. In order to measure the level of financial literacy of the
Bahraini investors, the approach of Lusardi and Mitchell (2006) was utilized
in this research effort. The data were analyzed using Pearson Correlation, tteat
and Chi-square test. The results reveal that the financial literacy level of
the Bahraini investors is found to be low (38.6%) and far from the needed
level. When we analyzed the level of financial literacy based on the
demographic variables, we found that women are generally less financially
literate than are men; respondents of age 41-50 are more knowledgeable
than all other age groups, and financial literacy is highly correlated with
education. Moreover, participants in high financial literacy group (HFLG)
have higher awareness level for all financial products except for certificate
of deposit and post office savings. Further, participants in low financial
literacy group (LFLG) mainly prefer to invest in traditional and safe
financial products and do not invest much in complex financial products
which are comparatively more risky and can give higher return
خلاصه ماشینی:
Bahrain was recognized by the World Bank as a high income economy (See also Abdeldayem 2015 a, 2015 b) Therefore, the overriding purpose of this study is to measure the level of financial literacy of the Bahraini individual investors.
For example, financial illiteracy has been considered as the reason forpoor financial practice behavior (Robb and Woodyard, 2011), inability to make informed financial decisions (Chen and Volpe, 1998), being unable to make personal contributions (Van Rooij, Kool, Prast, 2007), inadequate stock participation (Van Rooij, Lusardi and Alessi, 2011), irresponsible financial management behavior (Perry and Morris, 2005, Ludlum et al.
, 2012), unpreparedness for post-retirement times (Lusardi and Mitchell, 2007), portfolio under diversification (Guiso and Jappelli, 2008), wealth accumulation (Van Rooij, Alessi and Lusardi, 2012), poor investment decisions (Al-Tamimiand Bin Kalli, 2009),financial dissatisfaction (Yoong, See and Baronovich, 2012), no intention to control personal budget (Sharahbani, 2012), unimproved household financial management behavior (Hilgerth, Hogarth, and Beverly, 2003).
(Liu and Guo, 2008; Nunnally and Bernstein, 1994).
3. 3 Measuring Financial Literacy of the Bahraini Investors Moreover, in order to measure the level of financial literacy of respondents, the three questions of Lusardi and Mitchell (2006, 2007) and Lusardi (2008) were adopted in this study and they are as follows: 1- Suppose you had BHD100 in a savings account and the interest rate was 2% per year.